A passerby is injured while walking on the sidewalk of an abandoned property that is going through foreclosure.  Who is responsible – the owner or the foreclosing lender?  Like most other fact specific questions in the litigation world, it depends. A recent decision, McRoy v. Eskander, helps to shed some light and offer lenders some protection.

The plaintiff in McRoy slipped and fell on an icy sidewalk adjacent to an abandoned property going through foreclosure.  The plaintiff sued both Eskander and Bank of America – the mortgage lender – arguing that both defendants failed to properly maintain the sidewalk.  At the time of the accident, Eskander was the legal owner of the property, and remained so up until the sheriff’s sale (a requisite step in the foreclosure process) which had not yet taken place.

BOA was granted summary judgment by the trial court, successfully arguing that it did not maintain the property, but only inspected the premises on occasion to confirm that it was vacant, paid utility bills and taxes, and once performed yard work.  The plaintiff appealed, claiming that BOA – as the mortgagee in possession – had a duty to maintain the property in a reasonably safe condition.

In upholding the lower court’s ruling, the Appellate Division focused on the limited extent that BOA exercised possession and control of the property.  The court was not convinced that the one instance of yard work was evidence of the requisite amount of possession and control over the property, and explained that BOA’s payment of bills was simply protection of its collateral.  Rather, it determined that Eskander shirked his duties as owner of property by failing to properly maintain the sidewalk.

Thanks to Emily Kidder for her contribution to this post and please write to Mike Bono for more information.